Fed Cuts Rates Again - Jobs Growth Slows Down, Will There Be More Changes in 2025?

The Fed cut the federal funds rate by 25 basis points on October 29th, bringing the range to 3.75 %-4.00 %. It’s the second time this year the Fed has cut rates amid political divide.

In the press conference, Fed Chair Jerome Powell emphasized that another cut in December is not a guarantee. The Committee is split and navigating growing data uncertainty - jobs growth for one. As the government remains shutdown, long-term projections for employment data is a question mark.

The cut was motivated mainly by rising concerns about the weakening labor market and this is a big change from the Fed’s previous aggressive inflation-fighting approach. Adding to volatility.

At the same time, inflation remains somewhat high and the Fed continues to state that uncertainty around economic data as a main driver - added to the the current government shutdown which is not helping the matter. The current outlook on the market is complicated at this point with so many unknowns. The November jobs report will be important, but at this point, traders are anticipating a low number with bearish results for the market.

Heading into the press conference Wednesday, it appeared that this current cut was priced in by traders, but the market took a somewhat negative tone after Powell’s hawkish comments. Equity indexes initially led with modest gains but then the market reversed by days end. With October wrapping up, investors need to take a conservative approach as they await the next steps by the government.

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